Signaling a revival of the housing market, the foreclosure
market report released by RealtyTrac revealed a fall in the
overall foreclosure activity in Jan 2013. As per this leading
online marketplace of foreclosure properties, foreclosure filings
plunged 7% from Dec 2012 and 28% from Jan 2012. This brought the
aggregate number of properties receiving default, auction or
repossession notices to 150,864.
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Foreclosure starts - default notices issued and foreclosure
auctions (depending on the state's foreclosure procedure) -
declined 11% from Dec 2012 and 28% from Jan 2012 to 64,773
properties in the reported month. This was the lowest level since
Jun 2006. The primary reason for the drop was a significant fall
in issuance of notice of defaults in California as new
regulations on mortgage servicers were put in place in Jan 2013.
Likewise, bank repossessions (REOs) dipped 5% from the prior
month and 24% from the last-year month to 50,453 properties. This
was the lowest level since Feb 2008.
The top 10 states with the highest foreclosure rates were
Florida, Nevada, Illinois, Arizona, Georgia, Ohio, Washington,
California, Indiana and Michigan.
Moreover, the drop in overall foreclosure activity was a result
of the switching of mortgage servicers and the government to
other options to prevent foreclosures. Yet, the dip in
foreclosures is expected to be at an uneven pace, as processes
that are being used in handling these vary from state to state.
Foreclosure activity is expected to rise in the judicial states
as the states have substantial backlogs to clear. Further, as the
major lenders -
JPMorgan Chase & Co.
Bank of America Corporation
), Ally Financial Inc. and
Wells Fargo & Company
) - adjust to the new rules set under the National Mortgage
Settlement as well as several other laws, foreclosure activity is
bound to rise in the subsequent months.
Yet, we believe that the gradually stabilizing housing sector is
likely to aid homeowners to avoid foreclosures in the near term.
Also, the rate at which properties are entering the foreclosure
procedure is expected to trend down gradually, thereby lifting
the housing prices going forward. Moreover, the housing market
will get an opportunity to regain a solid foothold if there are
sufficient buyers for these properties.